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HSBC profits slide after taking $2.5b charges to cover US penalties

Published on Jul 30, 2012 5:30 PM

LONDON (AFP) - HSBC on Monday said its first-half profit fell after Europe's biggest bank took a US$2.0 billion (S$2.5 billion) hit to cover penalties from a money-laundering scandal in the United States (US) and insurance mis-selling claims.

Earnings after tax dropped 8.0 per cent to US$8.44 billion in the six months to June, compared with the same period last year, the Asia-focused bank said in a results statement .

HSBC took a provision of US$700 million to cover fines for failing to apply anti-money laundering rules, apologised again for the scandal and warned the overall cost could be "significantly higher". The bank said it also set aside US$1.3 billion in the first half to compensate clients in Britain who were mis-sold insurance.

The London-based lender said it continued to cooperate with authorities after US lawmakers last month accused it of failing to apply anti-laundering rules, benefiting Iran, terrorists and drug dealers.

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